As if onepath, marcos a dn LC don't give us enough to consideer here comes titanium! Look at TIC.
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Titanium boom fuels Allegheny's expansion
Posted: 6/27/2006 9:27 PM
By Len Boselovic
Jun 27, 2006 (Pittsburgh Post-Gazette - Knight Ridder/Tribune Business News via COMTEX) --
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Riding a crest of surging demand and high prices, Allegheny Technologies and other titanium producers are rushing to keep pace with their customers' appetites.
The Pittsburgh-based company yesterday said it will build a $325 million titanium plant in Utah, the second expansion Allegheny has announced in as many weeks and part of a $475 million plan for growing the specialty metals company's titanium business.
Prices for the high-end metal, used by the aerospace and defense industries, have increased 80 percent in recent years and industry analysts see no sign of a letup.
"This is the first simultaneous civilian and military upturn in decades. It's good for the next few years," said analyst Richard Aboulafia with the Teal Group, a suburban Washington, D.C., consulting firm.
Titanium and titanium alloys accounted for 18 percent of Allegheny's 2005 sales of $3.5 billion.
Allegheny previously announced a three-phase, $150 million expansion at titanium plants in Albany, Ore., and Bakers, N.C. The latest phase, announced last week, will increase production of titanium sponge, an elemental form of the metal, to 16 million pounds.
The plant announced yesterday, on a greenfield site in Rowley, Utah, will produce 24 million pounds of titanium sponge, bringing the company's overall annual capacity to 40 million pounds.
Production is expected to begin in the third quarter of 2008. Plans are contingent on purchasing property, government approval for land use, government incentives and the supply of raw materials and utilities.
Chairman, President and Chief Executive Officer Patrick Hassey said the plant will provide significant opportunities to increase revenue and profits as well as a stable, low-cost supply of a vital raw material.
"Strategically securing a cost-competitive source of titanium sponge is critical to achieving our profitable growth potential," Mr. Hassey said.
Thomas E. Williams, president of Allegheny's ATI Allvac unit, told industry officials in September that worldwide titanium shipments should top 265 million pounds annually by 2008, up 75 percent from 2003 levels. Commercial aerospace accounts for about 35 percent of the demand, he said.
The outlook has buoyed the stocks of titanium producers, with Titanium Metals Corp. pacing the pack. The Dallas company's shares have increased nearly 300 percent annually in the three years ended May 31, while Niles, Ohio-based RTI International Metals has risen 80 percent annually the same period.
Allegheny which finished yesterday at $65.59, up 31 cents, after hitting a high of $84.53 last month, are up 116 percent annually the last three years.
Jet aircraft producers like the lightweight metal because of its high heat tolerance, strength and corrosion resistance. Boeing's new 787 Dreamliner has a titanium content of 15 percent.
RTI is in the midst of a $35 million expansion after signing a 10-year agreement to supply titanium for aircraft produced by Boeing rival Airbus. The contract is expected to generate revenue of more than $800 million, RTI said. RTI also supplies titanium for the 787.
Plans to boost production haven't alleviated concerns that producers may not be able to timely deliver all the metal customers need.
"Specialty metals are a bottleneck in the production chain. That all adds up to strong prospects" for titanium producers, Mr. Aboulafia said.
Copyright (c) 2006, Pittsburgh Post-Gazette
Copyright 2006
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